FTR Trading Information Pack February 2018 - Mutual … · FTR Trading Information Pack February 2018 ... JAO Registration Guide ... An FTR Option is a hedging instrument that entitles

FTR Trading Information Pack

February 2018

Moyle and East West Interconnectors

20th February 2018 – Version 2.2

FTR Trading Pack 20th February 2018 v2.2 2

Contents

1. Introduction .................................................................................................................................... 3

2. I-SEM and The Forwards Electricity Market .................................................................................... 5

2.1 New market arrangements .................................................................................................... 5

3 Registering on JAO .......................................................................................................................... 8

3.1 FTR Market Trial and Training ................................................................................................. 9

4 Provisional Auction Calendars - 2018 ........................................................................................... 10

1. Moyle Provisional Auction Calendar (2018) ............................................................................. 11

2. EWIC Provisional Auction Calendar (2018) ............................................................................... 13

5. Interconnector Loss Factors .......................................................................................................... 15

6. Contact information ...................................................................................................................... 16

Appendix 1 – Relevant documents / links ............................................................................................. 17

Appendix 2 – FAQ .................................................................................................................................. 18

Appendix 3 – FTR Market Trial Training survey .................................................................................... 22

Appendix 4 – FTR Worked Examples .................................................................................................... 23

Appendix 5 – Loss-Adjusted Market Spreads Publication .................................................................... 27

Appendix 6 – JAO Registration Guide ................................................................................................... 28

Revision History

Version Issue Date Description

V1 27th October 2017 Original published document

V2 28th November 2017 p8: Update of the collateral options p9: Update of the FTR participation fees information p11 to 14: Update of the Moyle and EWIC 2018 Auction Calendar p22: Update of Appendix 3 on the training survey communication p24: Update of the LAMS formula in Appendix 4 p28: Addition of Appendix 5 to cover Loss-Adjusted Market Spread publication during the I-SEM Market Trial p29: Insertion of the latest JAO Registration Guide

V2.1 13th December p13: Correction of EWIC Auction Calendar start date for the first monthly auction.

V2.2 20th February p11: Update of the Moyle Auction Calendar – Monthly 4 [June] gate opening on 22nd May.


1. Introduction

The Moyle and East West Interconnectors link the electricity grids of the island of Ireland and Great

Britain via submarine cables running between converter stations in Northern Ireland / Scotland and

Ireland / Wales, respectively. Both of the High Voltage Direct Current (HVDC) connections are

capable of providing capacity of 500 MW, flowing in both directions (import / export).

To date, physical capacity on the Interconnectors has been sold in long-term and daily auctions on

an Auction Management Platform (AMP) specifically built to facilitate allocating capacity on Moyle

and EWIC.

As part of new wholesale electricity market arrangements for Ireland and Northern Ireland, the

Integrated Single Electricity Market (I-SEM) arrangements, the interconnectors will allocate long-

term (or ‘forward’) transmission rights in the form of Financial Transmission Right Options (FTRs).

An FTR Option is a hedging instrument that entitles the holder to receive payments based on the

hourly price difference between two interconnected and coupled1 markets.

FTRs on Moyle and EWIC will be allocated in auctions facilitated by the Joint Allocation Office (JAO),

a Luxembourg based entity established for the purpose of auctioning capacity on most

interconnectors throughout Europe.

Ahead of the I-SEM arrangements going live, this Trading Pack seeks to provide interested parties

with the necessary information to allow them to take the necessary steps to participate in auctions

of FTRs on Moyle and EWIC. It provides an overview of how the new market arrangements will work

on the Interconnectors, explains how to register with JAO to participate in auctions and provides

links to relevant documents such as the applicable auction rules. The Trading Pack also provides

provisional auction calendars, relevant parameters, frequently asked questions and a list of contact

details for Moyle, EWIC and JAO.

1 Coupling is the auctioning process where collected orders on power exchanges are matched and cross-zonal

capacity is allocated simultaneously for different bidding zones for a specific market timeframe, typically day-ahead.


List of terms and abbreviations

Term / Abbreviation Explanation

AMP Auction Management Platform (existing auction participation platform to be retired)

Coupling

The auctioning process where collected orders on power exchanges are matched and cross-zonal capacity is allocated simultaneously for different bidding zones for a specific market timeframe, typically day-ahead

DAM Day-Ahead Market

eCAT JAO Auction Platform (new platform for participating in auctions on the interconnectors)

EWIC East West Interconnector

FTR Financial Transmission Rights (in this document, “FTR” will refer more specifically to the FTR Options)

GB Great Britain (Northern Ireland forms a part of the Irish market, SEM)

HAR Harmonised Allocation Rules

HVDC High-Voltage Direct Current

Interconnectors In this document refers to both Moyle and EWIC interconnectors, unless otherwise stated

I-SEM Integrated-Single Electricity Market (on-going project)

JAO Joint Allocation Office

Moyle Moyle Interconnector

Participants Entities participating in the auctions (existing and prospective market participants)

SEM Single Electricity Market (existing market on the island of Ireland)

SEMO Single Electricity Market Operator

TLAF Transmission Loss Adjustment Factor

TSO Transmission System Operator


2. I-SEM and The Forwards Electricity Market

Moyle and EWIC currently sell a form of physical transmission rights available between the SEM and

GB markets. These rights enable a participant to buy interconnector capacity in a long-

term/forwards auction and/or at the day-ahead stage to nominate a flow of electricity across the

interconnector within the participant’s capacity holding, via the Single Electricity Market Operator

(SEMO) for the island of Ireland. The participant will buy energy equivalent to the flow in one market

and sell it in the other in order to earn the market spread i.e. the price difference between the two

markets.

Under the I-SEM arrangements, the forwards electricity market will be strictly financial and the

interconnectors will sell FTR Options (referred to elsewhere as simply “FTRs” in this document). FTR

Options are a form of one-way contract for difference, entitling the holder to receive the positive

day-ahead market spread in the direction of the FTR option. This section sets out what the new

environment will look like for the I-SEM arrangements.

2.1 New market arrangements

Market coupling

A key aspect of the I-SEM arrangements is the introduction of day-ahead market (DAM) coupling.

What this entails is a process whereby interconnector flows are determined by the day-ahead

electricity prices in the connected markets. This implicit allocation of capacity is viewed as more

efficient than the current explicit allocation where capacity holders nominate an interconnector flow

which can often be counter intuitive i.e. against the positive market spread so apparently inefficient.

In a coupled market, energy transactions involving sellers and buyers from different bidding zones

are centrally collected and cleared to maximise the efficient matching of trades. Trades from one

bidding zone to another (such as from GB to the SEM) are only restricted by cross-border capacity,

subject to allocation constraints.

Market coupling involves system and market operators working together to simultaneously allocate

cross-border capacity and optimise cross-border flows, without the need for explicit auctions. In

theory, as long as energy can flow freely, there will be a single price across all coupled markets.

When the network is congested between bidding zones, prices diverge between those zones.

With market coupling, the available interconnector capacity is made available to the market and,

where congestion exists between bidding zones, the interconnector is scheduled to flow from the

low-priced market to the high-priced market2. The result will be that ‘congestion rent’ is generated:

2 Subject to ramping constraints which mean that an interconnector may not immediately be able to reverse

its flow direction in response to the positive market spread direction changing from one period to the next.


Congestion rent =

MW delivered into high price market*DAM price in high price market

minus

MW flow out of low price market*DAM price in low price market

Due to electrical losses across the Interconnectors, the MW delivered to the importing market will

be lower than the MW taken from the exporting market. These congestions rents are collected by

the interconnector owner and these underpin the sale of FTRs in forward or long-term timeframes.

Financial Transmission Rights

As described above, FTRs entitle the holder to receive payments based on the hourly DAM price

difference between two coupled markets during a specified period of time in a specific direction3.

FTRs on the SEM-GB border will be auctioned on a ‘per-interconnector’ rather than a ‘per-border’

basis, i.e. there will be separate auctions for Moyle FTRs and EWIC FTRs. They will also be sold by

direction, i.e. there will be SEM-GB FTRs and GB-SEM FTRs - the former entitling the holder to a

payment when the GB DAM price is higher and vice versa for the latter.

The payment that an FTR holder is entitled to is the positive loss-adjusted day-ahead market spread.

A payment to an FTR holder is due when the market spread is positive in the direction of the FTR, i.e.

for a SEM-GB FTR, when the SEM DAM price is higher, no payment will be due.

Payouts will also be adjusted to reflect the impact of electrical losses.

3 Note that during the I-SEM Market Trial, the Loss-Adjusted Market Spreads will be calculated and published.

Refer to details in Appendix 5.

SEM

NI

GB

IE

Moyle

EWIC

Ballycronan MoreNorthern Ireland

AuchencroshScotland

PortanIreland

DeesideWales

NIàGBReference

Point IEàGB

GBàNIReference

Point GBàIE


Flow to SEM (NI/IE) Flow to GB

The loss-adjusted market spread (€ per MW), with reference to receiving side is calculated as follows

𝐿𝐴𝑀𝑆𝐺𝐵→𝐼𝐸𝐺𝐵→𝑁𝐼 = 𝑀𝐴𝑋 [(𝑆𝐸𝑀𝑝 −

𝐺𝐵𝑝

{1 − 𝐼𝐶𝐿𝐹}) , 0] 𝐿𝐴𝑀𝑆𝐼𝐸→𝐺𝐵

𝑁𝐼→𝐺𝐵 = 𝑀𝐴𝑋 [(𝐺𝐵𝑝 −𝑆𝐸𝑀𝑝

{1 − 𝐼𝐶𝐿𝐹}) , 0]

𝐿𝐴𝑀𝑆 = Loss-adjusted market spread (€ 𝑝𝑒𝑟 𝑀𝑊)

𝑆𝐸𝑀𝑝 = SEM day-ahead market price, in Euro

𝐺𝐵𝑝 = GB day-ahead market price, in Euro

ICLF is the loss factor for the relevant interconnector, 4.68% for EWIC and 2.36% for Moyle4

For reference, the Quantity at either side can be calculated as follows:

𝐼𝑛𝑄𝑡𝑦 = 𝑂𝑢𝑡𝑄𝑡𝑦 ∗ (1 − 𝐼𝐶𝐿𝐹) 𝑂𝑢𝑡𝑄𝑡𝑦 = 𝐼𝑛𝑄𝑡𝑦

(1 − 𝐼𝐶𝐿𝐹)⁄

𝐼𝑛𝑄𝑡𝑦 = Inbound / Receiving / Import side quantity (𝑀𝑊)

𝑂𝑢𝑡𝑄𝑡𝑦 = Outbound / Sending / Export side quantity (𝑀𝑊)

The applicable Interconnector Loss Factor will be different for Moyle and EWIC and will be a simple

percentage figure. More information is contained in Appendix 4.

Joint Allocation Office

JAO is a joint service company of 20 European Transmission System Operators (TSOs), performing

auctions of transmission rights on 28 borders in Europe. Moyle and EWIC are putting arrangements

in place such that JAO will run auctions of FTRs on their behalf.

JAO will be the single point of contact for the FTR market—that is, they handle registration, systems,

auctions, and manage all settlement. Parties wishing to participate in auctions of Moyle and EWIC

FTRs will contract directly with JAO.

JAO will operate billing and settlement arrangements with respect to FTR auctions, including:

• JAO holds collateral from participants in respect of participation in FTR auctions

• JAO collects the proceeds of FTRs cleared at auction from participants.

• JAO settles the FTR option pay-out with FTR holders.

• All amounts and payments with JAO are in Euros for both Moyle and EWIC

4 2017/2018 Approved TLAFs

http://www.eirgridgroup.com/site-files/library/EirGrid/2017-18-Approved-TLAFs-Accompanying-Note.pdf


Collateral put in place with JAO can be in the form of cash (held in a dedicated business account, also

referred to as a ‘dedicated business account’), or bank guarantee (optional). The collateral is

considered for all trading with JAO, which may be on multiple European borders. During the bidding

period, Participants get warning if their collateral with the bids is exceeded. This gives the

Participants the opportunity to update their collateral or bids before the auction closes.

Auction rules

FTR auctions will be conducted in line with Harmonised Allocation Rules for long-term transmission

rights (“HAR”)5 and the SEM-GB border specific annex (“Regional Annex”)6. Please note that while

this document provides an overview of some of the content of these documents, in the case of any

inconsistency, the HAR and Regional Annex shall prevail.

3 Registering on JAO

In order to participate in FTR Options auctions organised by JAO, you will need to complete certain

registration steps.

The first stage is to get your company registered with JAO. Subsequently, users for IT systems can be

set-up along with the authorisations for financial payments.

There are several documents that are required to be signed and submitted to JAO.

The full suite of documents can be found on the JAO Resource Centre here:

http://www.jao.eu/support/resourcecenter/overview.

The JAO Registration Guide is included as Appendix 6 of this Trading Pack and provides a step-by-

step guide.

Please send all documents to the following address, no later than 7 working days before the close of

the first auction in which you intend to participate:

Joint Allocation Office 2 Rue Bitbourg L-1273 Luxembourg-Hamm

An electronic certificate is required to access and use the JAO platform, e-CAT (please see FAQs on

electronic certificates).

5http://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/ANNEXES_HAR_DECISION/Annex%20I_171002.pdf

6http://www.eirgridgroup.com/site-files/library/EirGrid/Annex-7-to-the-Harmonised-Allocation-Rules.PDF

http://www.jao.eu/support/resourcecenter/overview

http://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/ANNEXES_HAR_DECISION/Annex%20I_171002.pdf

http://www.eirgridgroup.com/site-files/library/EirGrid/Annex-7-to-the-Harmonised-Allocation-Rules.PDF


There are no fees associated with participating in FTR auctions on JAO, however there is a monthly

fee (€10.42) on the business account. Participants only pay charges once they start using the

Business Account (after the first movement on the account).

For any queries on registration, please refer to the JAO Registration Guide (Appendix 6), FAQ details

in this document (Appendix 2), or use the JAO contact details listed in Section 6 of this Trading Pack.

For reference note that all market participants (including FTR holders) can sign up (self-service) for

market notifications in I-SEM in the same way they currently do for SEM7. This should allow them to

receive notification in relation to market performance including day-ahead fall back notification.

3.1 FTR Market Trial and Training

In advance of the first auctions, there are a number of trial, test, and training activities planned as

illustrated below.

The first phase was the initial trial which facilitated an early sight of the IT systems so that

participants could assess and validate their requirements to interact with the JAO platform.

The second phase is for participant training on the allocation platform. Training dates have been

scheduled on 17th and 18th January and are shown above for illustration.

The third phase is the formal FTR market trial. It’s expected that participants will have registered in

advance of participating in this trial. This trial will be similar to the initial trial but covering the full

scope of products available.

The key phase 3 dates are:

• 02/01/2018 – 19/02/2018: Web services tests/connectivity

• By 17/01/2018: User connectivity to JAO’s trial environment

• 22/01/2018 – 26/01/2018: Intensive week of interactive scenarios

7 http://www.sem-o.com/Publications/General/Participant%20Readiness%20Information%20publication.pdf

Phase2017

Jul Aug Sept Oct Nov

2018

Dec Jan Feb Mar

Enrolment

Survey

Enrolment

Initial Trial

Training

Trial

Platform go-live

1

2

3

Registration


• 05/02/2018 – 09/02/2018: Placeholder in case of scenario re-run

• During 02/2018: Settlement scenarios

The ‘Financial Transmission Rights Auction: Trial and Participant Test Plan’ and ‘Financial

Transmission Rights Auction: Initial Trial Report’ are available from:

http://jao.eu/support/resourcecenter/overview?parameters=%7B%22IsMoyleEwicInterconnectorsP

roject%22%3A%22True%22%7D

4 Provisional Auction Calendars - 2018

The go-live for Moyle and EWIC on the JAO platform is planned for March 2018. From this point

Moyle and EWIC will be shown on the JAO platform, the auction calendar will begin to be populated

in the system, and participants can enter default bids.

The provisional auction calendar dates with indicative volumes for both interconnectors are outlined

below.

The bidding windows for auctions will typically be as follows:

Yearly: 5 working days

Seasonal/half-yearly: 4 working days

Quarterly: 3 working days

Monthly: 2 working days

These working days are based on the Luxembourg calendar and holidays.

For the first auctions, which are for June 2018 products, the bidding windows will be open for 5

working days. This is based on participant requests to allow additional time for credit adjustments

for the initial auctions.

http://jao.eu/support/resourcecenter/overview?parameters=%7B%22IsMoyleEwicInterconnectorsProject%22%3A%22True%22%7D

http://jao.eu/support/resourcecenter/overview?parameters=%7B%22IsMoyleEwicInterconnectorsProject%22%3A%22True%22%7D

FTR Trading Pack 13th December 2017 v2.1 11

1. Moyle Provisional Auction Calendar (2018)

All Moyle auctions listed below are planned to start and end at 13:30 CET/CEST, with the exception of the monthly auction for September (Monthly 2),

which will start and end at 14:00 CET/CEST.

Month Start Date End Date

GB to NI (Import) NI to GB (Export)

Product Volume Product Volume

March 22nd

March 29th

March Monthly 1 [June] 80 Monthly 1 [June] 20

April 17th

April 19th

April Monthly 2 [June] 100 Monthly 2 [June] 20

May 2nd

May 4th

May Monthly 3 [June] 120 Monthly 3 [June] 20

22

nd May 24

th May Monthly 4 [June] 100 Monthly 4 [June] 20

June

1st

June 5th

June Monthly 1 [July] 80 Monthly 1 [July] 20

1st

June 6th

June Quarterly [July-Sep] 100 Quarterly [July-Sep] 20

12th

June 14th


15th

June 19th


July

3rd

July 5th

July Monthly 1 [Aug] 80 Monthly 1 [Aug] 20

6th

July 10th


4th

July 11th

July SEM Annual 1 [Oct-Sep] 70 SEM Annual 1 [Oct-Sep] 0

24

th July 26

th July Monthly 3 [Aug] 100 Monthly 3 [Aug] 20

August

3rd

August 7th August Monthly 1 [Sep] 80 Monthly 1 [Sep] 20

1st

August 8th

August SEM Annual 2 [Oct-Sep] 70 SEM Annual 2 [Oct-Sep] 0

6th

August 10th

August Seasonal [Oct-Mar] 50 Seasonal [Oct-Mar] 20


Month Start Date End Date

GB to NI (Import) NI to GB (Export)


14th

August (14:00)

16th

August (14:00)

Monthly 2 [Sep] 120 Monthly 2 [Sep] 20

17th

August 21st

August Monthly 3 [Sep] 100 Monthly 3 [Sep] 20

17th

August 22nd

August Quarterly [Oct-Dec] 60 Quarterly 1 [Oct-Dec] 20

22nd

August 29th

August SEM Annual 3 [Oct-Sep] 70 SEM Annual 3 [Oct-Sep] 20

September 4th

September 6th

September Monthly 1 [Oct] 80 Monthly [Oct] 20


2. EWIC Provisional Auction Calendar (2018)

All EWIC auctions listed below are planned to start and end at 13:30 CET/CEST.

Month

Start Date End Date

GB to IE (Import) IE to GB (Export)


April

27th

March 3rd


9th

April 11th


20th

April 25th

April Quarterly 1 [July-Sep] 100 Quarterly 1 [July-Sep] 100

May

7th

May 9th


17th

May 22nd

May Quarterly 2 [July-Sep] 100 Quarterly 2 [July-Sep] 100

23rd

May 25th


June 5th

June 7th


11

th June 13

th June Monthly 2 [July] 100 Monthly 2 [July] 100

18

th June 20

th June Monthly 3 [July] 100 Monthly 3 [July] 100

July

2nd

July 4th


9th

July 11th


11th

July 18th

July SEM Annual [Oct-Sep] 50 SEM Annual [Oct-Sep] 50

20th

July 24th


25th

July 31st

July Seasonal [Oct-Mar] 50 Seasonal [Oct-Mar] 50

August

31st

July 3rd

August Quarterly 1 [Oct-Dec] 100 Quarterly 1 [Oct-Dec] 100

7th

August 9th



Month

Start Date End Date

GB to IE (Import) IE to GB (Export)


10th

August 14th


17th

August 22nd

August Quarterly 2 [Oct-Dec] 100 Quarterly 2 [Oct-Dec] 100

22nd

August 24th


September

3rd

September 5th

September Monthly 1 [Oct] 100 Monthly 1 [Oct] 100

17th

September 19th

September Monthly 2 [Oct] 100 Monthly 2 [Oct] 100


5. Interconnector Loss Factors

The current SEM method for attribution of a Transmission Loss Adjustment Factor (TLAF) provides

separate TLAF figures for day and night for each month for the annual period from October to

September by which the energy provided by units on the Moyle and EWIC interconnectors is

adjusted for transmission system losses for settlement purposes.

For the I-SEM arrangements an annual single loss factor is to be determined for each interconnector.

This same loss factor per interconnector will be used for all of the SEM-GB coupled day-ahead and

intraday markets, imbalance settlement in the SEM market, and adjustment of market spread for

FTR remuneration.

With this approach there should be consistency between the loss factors used in the various market

timeframes and the process of valuing and settling FTRs will be simplified.

The loss factors applicable for Moyle and EWIC will be8:

Applicable interconnector loss factor

Moyle 2.36%

EWIC 4.68%

8 Further information available at http://www.eirgridgroup.com/site-files/library/EirGrid/I-SEM-

Interconnector-Losses-Information-Paper-v1.0.pdf and http://www.eirgridgroup.com/site-files/library/EirGrid/2017-18-Approved-TLAFs-PDF-Version.pdf

http://www.eirgridgroup.com/site-files/library/EirGrid/I-SEM-Interconnector-Losses-Information-Paper-v1.0.pdf

http://www.eirgridgroup.com/site-files/library/EirGrid/I-SEM-Interconnector-Losses-Information-Paper-v1.0.pdf

http://www.eirgridgroup.com/site-files/library/EirGrid/2017-18-Approved-TLAFs-PDF-Version.pdf

http://www.eirgridgroup.com/site-files/library/EirGrid/2017-18-Approved-TLAFs-PDF-Version.pdf


6. Contact information

Moyle Interconnector First Floor The Arena Building 85 Ormeau Road Belfast BT7 1SH Tel: +44(0)28 9043 7580 Fax: +44(0)28 9024 9673 Email: [email protected]

East West Interconnector Block 2 The Oval 160 Shelbourne Road Ballsbridge Dublin D04 FW28 Tel: +353 (0)1 677 1700 Fax: +353 (0)1 661 5375 Email: [email protected]

Joint Allocation Office 2 Rue Bitbourg L-1273 Luxembourg-Hamm Tel : +352 (0)27 62 38 38 Fax : +352(0)27 62 38 99

Service desk : http://helpdesk.jao.eu

Email : [email protected]

mailto:[email protected]



http://www.google.ie/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiY7ZKmgevWAhXL7xQKHXb5BEoQjRwIBw&url=http://www.50hertz.com/en/50Hertz/Cooperation-ventures&psig=AOvVaw1xUH-avQkI2a7mibW2Bb8f&ust=1507895145184762


Appendix 1 – Relevant documents / links

EWIC

http://www.eirgridgroup.com/customer-and-industry/interconnection/

Moyle

http://www.mutual-energy.com/

JAO

http://www.jao.eu/main


http://www.jao.eu/support/resourcecenter/overview?parameters=%7B%22IsMoyleEwicInterconnec

torsProject%22%3A%22True%22%7D

SEMO / I-SEM

http://www.sem-o.com/Pages/default.aspx

http://www.sem-o.com/isem/Pages/Home.aspx

HAR

https://electricity.network-codes.eu/network_codes/fca/har/

http://www.acer.europa.eu/Official_documents/Acts_of_the_Agency/ANNEXES_HAR_DECISION/An

nex%20I_171002.pdf

http://www.eirgridgroup.com/site-files/library/EirGrid/Annex-7-to-the-Harmonised-Allocation-

Rules.PDF

http://www.eirgridgroup.com/customer-and-industry/interconnection/

http://www.mutual-energy.com/

http://www.jao.eu/main


http://www.jao.eu/support/resourcecenter/overview?parameters=%7B%22IsMoyleEwicInterconnectorsProject%22%3A%22True%22%7D

http://www.jao.eu/support/resourcecenter/overview?parameters=%7B%22IsMoyleEwicInterconnectorsProject%22%3A%22True%22%7D

http://www.sem-o.com/Pages/default.aspx

http://www.sem-o.com/isem/Pages/Home.aspx

https://electricity.network-codes.eu/network_codes/fca/har/






Appendix 2 – FAQ

1. Where should the loss adjustment factor be applied?

The SEM-GB HAR Annex which notes the formula for the loss-adjusted market spread and confirms

the receiving side as the reference point (art. 2.7).

For example, if there is a maximum flow from IE to GB on EWIC, the sending side MW is about 530

and the receiving side is 500. Some interconnectors also consider a mid-channel approximation

(515). The loss-adjusted price spread needs to be calculated consistent with the reference point

used and the receiving side will apply for Moyle and EWIC.

2. When is settlement for FTRs completed?

Settlement is on a Monthly basis:

Once a month invoices or self-billings are issued to participants

The market periods invoiced in M+1 are typically the following (where M = month):

o Yearly, seasonal and quarterly auctions for M+2

o Monthly auctions for M+1

o Returns for M+1

o Rights remunerations (FTR Payout) for M-1

o Any other compensations for M-1

For example:

Invoicing Run in April 2016 (M+1) – JAO invoice

Yearly auctions for May 2016 (M+2)

Monthly auctions for April 2016 (M+1)

Returns for April 2016 (M+1)

Any other compensations (FTR Payout, Curtailment compensation) for March 2016 (M)

3. Will there be any FTR market trials before go-live?

Yes. We intend to test the main scenarios in the week from the 22nd to 26th January 2018. It is likely

that users will need to be dedicated to interacting with this, albeit one per company is sufficient.

Depending on the results from this we have a second week for scenarios from the 5th to 9th February

2018. During this second week it’s likely that some of the system outputs would be simulated for

users to access, e.g. FTR payout and settlement.

For anyone who has registered with JAO by December, they’ll have connectivity to the live JAO

environment so configuring access to the test environment should be trivial. We’d hope to complete

that by the 17th January for all participants.


There is an addition for anyone who will be using web services as at least one participant has

confirmed use of these. We’re trying to line up web service testing from the start of January if not

before. If you intend to use these, please let us know so that we can plan accordingly.

4. How does curtailment apply for FTRs?

In the current market arrangements, where an interconnector has unplanned reduced capability, all

capacity holders have their rights reduced pro-rata. Under the HAR and Regional Annex, FTRs are

significantly more firm. FTRs may only be ‘curtailed’ in limited circumstances and in the vast majority

of cases this will have no impact on the payment received by FTR holders. A cap applies for the total

amount of curtailment compensations that will be paid out in one month and FTR payments will only

be impacted if this cap is breached.

See Appendix 4 for a worked example on this.

5. Does the Participation Agreement get updated with new borders? What does this mean for

me, do I need to re-sign it? How does this work for Ireland-GB specifically?

There won’t be a GB-Ireland annex in the Participation Agreement. The Annexes in the Participation

Agreement are for auctions which are not covered by the HAR and have separate rules (i.e. Swiss

Long Term Rules, Daily, Intraday, Shadow Auction Rules).

Signing up to the Participation Agreement means the HAR rules will apply. Existing JAO registered

Participants would have needed to fill out the ‘Amendment No. 1 to Participation Agreement’. This is

not relevant for new registrations.

6. Is an Auction Tool User account form needed for each user? Is there a limit to the number of

users?

You need to fill out one form per user. There is no limit on the number of users. Most companies

would have about 5 users, with the biggest having 15.

7. Where do I get a Digital Certificate?

A digital certificate is an electronic ‘passport’. As part of user registration with JAO, the digital

certificate you intend to use needs to be identified.

The JAO ‘Information System Rules’ document is available from http://jao.eu:

Support > Resource Center > eCAT – New Auction Tool > Information System Rules

http://jao.eu/


Appendix 1 outlines the desktop software requirements to access the JAO auction tool while

Appendix 2 provides details on the digital certificates that are supported by JAO. The JAO list of

trusted certificate authorities is available from http://jao.eu:

Support > Resource Center > eCAT > Trusted certificate authorities

8. What Certificate serial number should be included on the user account form?

The serial number from the digital certificate should be input here (you may find it in the public part

of the certificate under the Details tab as Serial number). The public part of the certification (in a cer

format) should also be provided.

These should be submitted through the JAO Service Desk (http://helpdesk.jao.eu), pdf and cer file

together.

9. Is the signature card intended for the people who will draw down funds from the business

account and therefore the people who have been given power of attorney?

Yes – it is for those receiving delegated authority (i.e. will be signing for transfers).

10. Is a Power of Attorney (POA) form required per person?

Yes – one per person for anyone signing for a funds transfer. Typically there would be 2 or 3

signatories per company. A company signatory would need to delegate authority to themselves also

if they will sign for a funds transfer.

If required, JAO can also set it up that at least two signatures are needed.

11. Is the ‘funds transfer request form’ only required when funds need to be transferred or does

the Participant need to complete this in advance of “Go-live” to have the transfer details in

place?

The form would typically be filled out as required, i.e. after go-live when funds are received and to

be withdrawn. The transfer is to the bank account specified in the participation agreement

12. How do I get an electronic certificate? The current certificate comes from SEMO for use on

AMP – will this still be the same for JAO?

SEMO will not support the use of certificates as occurs today on AMP. With JAO it is up to the

individual participants to source the certificates that they wish to use. If you already have a supplier

that is not on the JAO approved list, we can get them to test it and add if appropriate.

http://jao.eu/

http://helpdesk.jao.eu/


Often the certificates can only be provided on a per user level are they are a form of individual user

identity, however there are exceptions such as a company cert for web service (computer-based)

access. It’s best to tease this out directly with JAO or try it when requesting user access.

When JAO set-up users they can be set-up as full access, or read-only users.

13. Can I use a SEM or I-SEM digital certificate?

As part of the Moyle & EWIC implementation project the current SEM and new I-SEM certificates will

be testing and if successful will be added to the list of trusted certificate authorities. Note that these

certificates are provided by EirGrid Group under other market agreements. To have full control over

certificate expiry and security it may be better for registered participants to source their own

certificates for interacting specifically with JAO.


Appendix 3 – FTR Market Trial Training survey

A training survey form is being issued to understand the training need on e-CAT and FTR markets.

Upon submission of the completed forms to the interconnector owners ([email protected]), the

needs of individual companies and on the whole will be assessed in order to propose an appropriate

training programme. The form is also available from http://jao.eu:

Support > Moyle and EWIC Interconnectors Project > Market Trial > Formal Market Trial


http://jao.eu/


Appendix 4 – FTR Worked Examples

Ordinary course of business calculation of FTR payouts (loss-adjusted market spread)

The FTR payout for each hour is the positive loss adjusted market spread in the relevant direction.

LAMS

SEM Price GB Price Losses GB-SEM SEM-GB

X y z% max (0, x-y/(1-z)) max (0, y-x/(1-z))

50.00 40.00 2.36% 9.03 0.00

40.00 50.00 2.36% 0.00 9.03

50.00 40.00 4.68% 8.04 0.00

40.00 50.00 4.68% 0.00 8.04


Calculation of FTR payouts - trip after day-ahead firmness deadline

FTRs are firm after the day-ahead firmness deadline so a trip has no impact on FTR payouts for the trading day D in which the trip occurs.

LAMS


x y z% max (0, x-y/(1-z)) max (0, y-x/(1-z))

50.00 40.00 2.36% 9.03 0.00

40.00 50.00 2.36% 0.00 9.03

50.00 40.00 4.68% 8.04 0.00

40.00 50.00 4.68% 0.00 8.04

The FTR payout for each hour is still the positive loss adjusted market spread in the relevant direction, i.e. FTR holders are not impacted by a 'within day trip' as curtailment may not occur.


Calculation of curtailment compensations (pro-rata loss-adjusted market spread) - trip before day-ahead firmness deadline

FTRs can be curtailed before the day-ahead firmness deadline so a trip may impact on FTR payouts (curtailment compensation) for the trading day D+1 after a trip occurs.

The default position is that FTR holders should still receive curtailment compensation equal to the loss adjusted market spread but curtailment compensations are capped.

The cap is broadly equal to the interconnector's total auction and congestion income in that month less FTR payouts made in that month (please refer to HAR for further detail).

If an interconnector has an outage meaning that the curtailment compensations exceed the monthly cap, the curtailment compensations will be reduced pro-rata:

LAMS

Uncapped expected curtailment compensation in month (a)

Interconnector income available for compensation cap in month (b)

Pro-rata adjustment: min(1, (b)/(a))

Curtailment compensation (LAMS pro-rata)


GB-SEM SEM-GB

x y z%

max (0, x-y/(1-z))

max (0, y-x/(1-z))

50.00 40.00 2.36% 9.03 0.00

108,398.20 150,000.00

1.00 9.03 0.00

Scenario assumes a curtailment for 24 hours. (a) LAMS for 24 hours, and 500MW of curtailment (b) illustrative amount, to demonstrate pro-rata approach


In the above, curtailment compensation for each curtailed hour is still the loss adjusted market spread as the cap on curtailment compensations has not been reached, i.e. there is no pro-rata adjustment and FTR holders are not impacted by the outage and subsequent curtailment.

In the below example, the curtailment compensation is reduced pro-rata as the cap on curtailment compensations has been exceeded:

LAMS

Uncapped expected curtailment compensation in month (a)

Interconnector income available for compensation cap in month (b)

Pro-rata adjustment: min(1, (b)/(a))

Curtailment compensation (LAMS pro-rata)


GB-SEM

SEM-GB

x y z%

max (0, x-y/(1-z))

max (0, y-x/(1-z))

50.00 40.00 2.36% 9.03 0.00

108,398.20 100,000.00

0.92 8.33 0.00

Due to the monthly cap, FTR payouts would only be expected to be reduced where there is a long unplanned outage of an interconnector. Otherwise, FTR holders can expect to receive the full positive LAMS, regardless of short duration outages.


Appendix 5 – Loss-Adjusted Market Spread

Publication during the I-SEM Market Trial

The Loss-adjusted Market Spreads (LAMS) will be published during the I-SEM Market Trial. The

information will be presented in an excel format with the following information:

Day-ahead GB price

Day-ahead SEM price

LAMS for each of Moyle and EWIC, in each direction, and for each hourly9 period

Note: The price publications above will be data from the I-SEM market trial only. After I-SEM go-live

we expect that static links to the NEMO websites with this data will be provided.

The publication will be done via the http://test.jao.eu/main > TSO Message Board.

9 If any Day-Ahead Fallback scenarios occur during the I-SEM Market Trial, the applicable ½ hourly values will

be published.

http://test.jao.eu/main


Appendix 6 – JAO Registration Guide

Documents

FTR Trading Information Pack February 2018 - Mutual … · FTR Trading Information Pack February 2018 ... JAO Registration Guide ... An FTR Option is a hedging instrument that entitles